Question:
On September 30, 2000, Mattel®, a major toy manufacturer, virtually gave away The Learning Company®, a maker of software for toys, to rid itself of a disastrous acquisition of a software publishing firm that actually had cost the firm hundreds of millions of dollars. Mattel, which had paid $3.5 billion for the firm in 1999, sold the unit to an affiliate of Gores Technology Group for the rights to a share of future profits. Was this related or unrelated diversification for Mattel? Explain your answer. How might your answer to the first question have influenced the outcome?